Spain

Over the past year, the following significant reforms have been made to Spanish law on direct taxation of individuals: 

Royal Decrees-Law 3/2025 and 16/2025

Royal Decree-Law 3/2025, enacted on April 1, 2025, establishing the 2025 edition of the MOVES III incentive program for electric mobility, was published in Spain's Official State Gazette on the same date. 

Under this decree-law, the tax credit for the acquisition of plug-in electric and fuel cell vehicles, as well as for charging points, was extended for an additional year. 

Pursuant to Royal Decree-Law 16/2025 of December 23, 2025, a further extension has been approved through December 31, 2026. 

Organic Law 1/2025

Organic Law 1/2025, of 2 January 2025, introduces measures to the Justice System for efficiency purposes. Since it establishes mandatory mediation (or an alternative method to resolve disputes) before the filing of a lawsuit, within civil, commercial, and social processes, the Law adapts the tax exemption on compensation received as a result of civil liability for personal damages, regulated in the PIT Law, which was applicable only when it was established by a judgement.

As a consequence of this measure, the law provides that it will also be applicable when the compensation is agreed through alternative dispute resolution methods and payment is made by the insurance company.